Marine-derived bacteria and fungi are promising sources of novel bioactive compounds that are important for drug discovery programs. However, as encountered in terrestrial microorganisms there is a high rate of redundancy that results in the frequent re-discovery of known compounds. Apparently only a part of the biosynthetic genes that are harbored by fungi and bacteria are transcribed under routine laboratory conditions which involve cultivation of axenic microbial strains. Many biosynthetic genes remain silent and are not expressed in vitro thereby seriously limiting the chemical diversity of microbial compounds that can be obtained through fermentation. In contrast to this, co-cultivation (also called mixed fermentation) of two or more different microorganisms tries to mimic the ecological situation where microorganisms always co-exist within complex microbial communities. The competition or antagonism experienced during co-cultivation is shown to lead to a significantly enhanced production of constitutively present compounds and/or to an accumulation of cryptic compounds that are not detected in axenic cultures of the producing strain. This review highlights the power of co-cultivation for increasing the chemical diversity of bacteria and fungi drawing on published studies from the marine and from the terrestrial habitat alike.